Looks like System Restore has backed up a virus. Only way to get rid of it is to delete all restore points. Antivirus programs cannot access the system restore folder. Btw your virus warning probably says there is a virus in C:\System Volume Information\Restore\RP(any number) and not C:\System Restore..., right? System Volume Information is a hidden folder and you have to take special steps to gain access, depending on filesystem and XP version.
Easiest way to delete all restore points and the virus is to disable System Restore on all drives (Windows key + pause > System Restore), reboot and then reenable System Restore again.

yoyo - just got home from bowling and did my usual quick search of the forum and spotted this thread - thought to myself - I'll have to search for that post I made on this area - dang ya beat me to it - let's hope it helps!